Community Solar

Two-thirds of American households cannot install rooftop solar. They rent, live in apartments, have shaded roofs, or lack the credit for a loan. Community solar was designed to give them access anyway.

Community solar is a model in which a shared solar installation (typically 1-5 MW, ground-mounted or on a commercial roof) sells subscriptions to individual utility customers who receive bill credits proportional to their share of the project's output. Subscribers do not host panels. They sign up, get credited for a portion of generation, and pay the project developer a subscription fee that is lower than the credit they receive, netting a modest savings of 5-15% on their electricity bill.

How the money flows. A 2 MW community solar farm in Minnesota generates 3,500 MWh per year. It has 300 subscribers, each credited for roughly 11.7 MWh annually.

If a subscriber's credit is worth $0.12/kWh but they pay the developer $0.10/kWh, who captures the remaining value?

The subscriber saves $0.02/kWh. On 11.7 MWh, that is about $234/year. The developer captures the $0.10/kWh subscription revenue plus any tax credits, which is what makes the project financeable. The utility loses generation revenue but (in most states) still collects fixed charges for grid infrastructure.

Community solar has grown to nearly 8 GW nationally by mid-2024. The policy tension: if bill credits are set at full retail rate, community solar replicates the same cross-subsidy problem as rooftop net metering, just at larger scale.

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